Who Was Astroturfing Forged Letters Against FinReg?

By Barry Ritholtz - February 12th, 2011, 7:57AM

Q: Why do Burger King Franchisees care about derivatives reform?
A: huh ?

NPR discusses what a Bloomberg reporter found:

Last summer, one still unnamed company hired a PR firm to launch a “grassroots letter writing campaign” on derivatives reform. The PR firm hired a contractor, who hired a subcontractor in Arkansas. And instead of finding real people who care about derivatives — financial contracts tied to some other asset — the subcontractor went ahead and forged letters from grassrootsy sounding people.

The scam is a firm (likely a bank) hires a PR firm, who then hires a sub-contractor, who hires a sub sub-contractor. They send letters to congress, signing them to individual business people as well as Judges and Sheriffs — despite the fact that impersonating law enforcement personnel is a a felony.

This is absolutely unnecessary and serves only to fabricate a false plausible deniability for the original bank. But its a giant scam, and the bank and its employees are still liable for their actions. Anyone fooled by this purposeful chain of contractors simply does not have a clue.

I keep saying this over and over: Its time to prosecute these criminals and put them into general prison population.

>
NPR broadcast:

Sources:
Forged Comment Letters Sent to U.S. Regulators Writing Derivative Rules
Silla Brush and Clea Benson
Bloomberg, Nov 30, 2010
http://www.bloomberg.com/news/2010-11-30/forged-comment-letters-sent-to-u-s-regulators-writing-derivatives-rules.html

Forged Letters, And Other Stories From The Trenches Of Financial Regulation
CHANA JOFFE-WALT
NPR, February 12, 2011
http://www.npr.org/blogs/money/2011/02/10/133660842/forged-letters-and-other-stories-from-the-trenches-of-financial-regulation

PERMALINK
Category: Bailouts, Derivatives, Legal, Regulation.

Comments

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

16 Responses to “Who Was Astroturfing Forged Letters Against FinReg?”

Moss Says:
February 12th, 2011 at 8:24 am
Since every thing the banks do has been decriminalized via lack of enforcement the risks of this behavior are limited. The lawyers make sure the criminal activity is so obscure that the burden of proof becomes extremely difficult. This is another example of the insidious breakdown of ethics in the system.
BusSchDean Says:
February 12th, 2011 at 8:50 am
Indeed! I have worked with DOJ, SEC, and FTC prosecutors — earnest people (at least the ones I worked with) who saw real value in having the bad guys and gals spend a bit of time in jail. The cliche about white collar criminals fearing jail/prison more than civil suits is true. Maybe they all watched the Shawshank Redemption — ouch! Where are these earnest prosecutors when we need them? People “trust” the system to put things right when individuals act badly. When that doesn’t happen should people continue to trust the system in other ways?

BR, sorry you not in Phoenix this weekend as I would have liked to hear your talk. Yesterday it was well into the 70s. Nice break from the east coast cold.
rip Says:
February 12th, 2011 at 9:01 am
You keep raising critically important questions. And never getting the right answers.

Guess that’s an answer right there.

Bananamerica.
bigstar99 Says:
February 12th, 2011 at 9:17 am
Also see this earlier story by the same Bloomberg reporters:

http://www.bloomberg.com/news/2010-12-01/cftc-refers-forged-comment-letters-on-trading-rule-to-justice-department.html

Since the letters in question supported placing tighter limits on bank ownership of clearinghouses, the inclusion of the “(likely a bank)” comment seems odd.
scottinnj Says:
February 12th, 2011 at 9:25 am
I think it is journalism like this (and I mean that as a compliment) which is why you are hearing about npr funding being on the chopping block. Reminds that I should renew my subscription. Planet Money is a great program – my wife who is not experienced in finance learned more about the securitization industry from following their story of their investment in Toxie than in any other forum (sorry Barry)
advsys Says:
February 12th, 2011 at 9:51 am
Agreed! We must as a society find the will to put some meat behind the laws of the land.
Joseph j7uy5 Says:
February 12th, 2011 at 10:17 am
They appear to believe in “felony remoteness.”
teraflop Says:
February 12th, 2011 at 10:29 am
This is what can happen even if lobbying is curtailed; influence will be sought, peddled, and successfully obtained no matter what law is drafted. The law merely sets the astroturf upon which the game is played. If they can get a 4-point shot into the NBA, they can do anything.
franklin411 Says:
February 12th, 2011 at 11:37 am
@scottinnj
Those were my thoughts exactly. It’s no accident that the GOP’s top priority is to eliminate NPR…
contrabandista13 Says:
February 12th, 2011 at 12:02 pm
Barry:

“….I keep saying this over and over: Its time to prosecute these criminals and put them into general prison population….”

You can start looking here….. You’ll find many of the parties that are engaged in this type of criminal activity…. You want names…? here they are….. http://www.salon.com/news/opinion/glenn_greenwald/index.html… It’s time for Eric Holder to start taking names and kicking ass, however, it’s unlikely , his record as AG has demonstrated sycophantic aspect to the powers of manipulation and disinformation….

There are quite a few related links on this story…

http://blogs.forbes.com/andygreenberg/2011/02/09/did-security-firms-pitch-bank-of-america-on-sabotaging-wikileaks/

http://www.huffingtonpost.com/2011/02/10/wikileaks-glenn-greenwald-bofa-neutralizing_n_821510.html

http://www.boingboing.net/2011/02/10/disgraced-security-f.html

http://yglesias.thinkprogress.org/2011/02/get-greenwald/

http://reason.com/blog/2011/02/10/get-glenn-greenwald

http://www.techdirt.com/articles/20110209/22340513034/leaked-hbgary-documents-show-plan-to-spread-wikileaks-propaganda-bofa-attack-glenn-greenwald.shtml

It’s the new modus operandi, disinformation, fraud, extortion and our government has been negligent either by design or omission. Just look at the most recent campaign against Julian Assange….

Best regards,

Econolicious
teraflop Says:
February 12th, 2011 at 12:34 pm
scottinnj,

Agree NPR has much going for it, as does BB in terms of telling us what the traditional network/cable/print MSM won’t. However on NPR there is still old 1960s-to-1970s detritus, much of it local, among their good assets like Planet Money, such as programs that endlessly advocate unions-for-all and endless welfare programs. That’s the one thing that holds me off from paying for a “subscription.”

As for learning the “securitization industry” NPR had a great item once involving spending (I hesitate at using the word investing) about $1000 on a slice of an ABS structure that was a great lesson in how they’re priced in the secondary markets. As one who has valued and facilitated structuring of a particular form of ABS, I was able to still learn something beyond the quantitative aspects of complex pricing. Barry’s lessons are blessedly succinct and pull you to the subject rather than teaching it outright, it’s up to us to remain willing to endlessly learn and apply our own wisdom and those of others.
Bob A Says:
February 12th, 2011 at 5:34 pm
perhaps they could be jailed in the same wing as the people who fabricated the lies that got us into the Iraq war…
Transor Z Says:
February 12th, 2011 at 7:56 pm
The security firm Greenwald/ Wikileaks story is enough to make you sleep with the light on. Uber-creepy shit. Makes forging comment letters seem like a ho-hum crime.

BTW, “felony remoteness” above was awesome.

But I firmly believe it’s anarchic behavior rather than organized conspiracy. These types are thuggish in thought and manner and ultimately crude in their technique. Mall cop wannabes. Look at the goofy procession of mouthpieces in forums like this one.
Francois Says:
February 13th, 2011 at 10:05 pm
“But I firmly believe it’s anarchic behavior rather than organized conspiracy.”

Sorry to be the bearer of bad news but you should read this:

http://www.salon.com/news/opinion/glenn_greenwald/2011/02/11/campaigns

[...] perhaps most disturbing of all, Hunton & Williams was recommended to Bank of America’s General Counsel by the Justice Department — meaning the U.S. Government is aiding Bank of America in its defense against/attacks on WikiLeaks.

[...] The very idea of trying to threaten the careers of journalists and activists to punish and deter their advocacy is self-evidently pernicious; that it’s being so freely and casually proposed to groups as powerful as the Bank of America, the Chamber of Commerce, and the DOJ-recommended Hunton & Williams demonstrates how common this is. These highly experienced firms included such proposals because they assumed those deep-pocket organizations would approve and it would make their hiring more likely.

But the real issue highlighted by this episode is just how lawless and unrestrained is the unified axis of government and corporate power.

We are FAR from anarchic behavior here, aren’t we? BTW, remember this post by Barry? http://www.ritholtz.com/blog/2010/09/you-vs-corporations/

Back to Glennzilla:

I’ve written many times about this issue — the full-scale merger between public and private spheres — because it’s easily one of the most critical yet under-discussed political topics.

Well…duh! Can it be otherwise when pretty much every big media outlet is in the hands of corporate conglomerates? There is a very good reason why the FCC has approved EVERY GODDAMN media merger (despite virulent opposition from the citizens…you know, those little pigs only good as long as the powers that be can pick into their pockets?) during the last 30 years. The expression “bought and paid for rent-a-Congress” (another one by Barry) extend to all the agencies that have a say on corporations.

Back to the story:

Especially (though by no means only) in the worlds of the Surveillance and National Security State, the powers of the state have become largely privatized. There is very little separation between government power and corporate power. Those who wield the latter intrinsically wield the former. The revolving door between the highest levels of government and corporate offices rotates so fast and continuously that it has basically flown off its track and no longer provides even the minimal barrier it once did. It’s not merely that corporate power is unrestrained; it’s worse than that: corporations actively exploit the power of the state to further entrench and enhance their power.

Yup! We’re surrounded by “savvy businessmen” (Obummer’s praise to the banksters), no doubt about that!

But the fact is there, clear as pure water on a cloudless day: the merger between corporate and state power is very advanced in this country. We can already feel its effects in the form of a jobless recovery, that has been granted all the lame ass excuses in the book, yet, is UNIQUE to the USA. ALL the other countries of the G-8 have recovered a lot of the employment lost during the recession, and Canada has now MORE jobs than they had in September 2008. And let’s not get started about the rentier oligarchy we’ve got now.

And that is the least detrimental results of this unholy alliance. Civil Rights much, anyone? How d’ya like it when your own President can declare with a straight face that he has the power to target any American citizen for due process-free indefinite detention without trial?

Or to witness a big corporation plunder your patents at will and there is nothing you can do about it? In the case linked below, admire the infinite sleaze with which corporate attorneys block every attempt of an inventor to collect his legit dues by enlisting the power of State Secrets. Make sure you swallow an anti-nausea medication beforehand.

http://www.wired.com/science/discoveries/news/2005/09/68894
Transor Z Says:
February 14th, 2011 at 1:56 pm
From Merriam-Webster’s:

ANARCHY

1a: absence of government

1b: state of lawlessness or political disorder due to the absence of governmental authority

————————-

I think as people we’re prone to a kind of fallacy of composition error when it comes to the amorphous notion of “The Powers That Be.” Yes, there’s an uber-class overlay at the top of the food chain comprising a handful of similar dominant personality types, but fallacious reasoning assumes that similarity of personality equals common cause.

You can always take comfort in the fact that kings get jealous of one another and make war on each other. The peasants get horse-traded and are the first to feel the impact of war, but that’s what peasants are for.
Astroturfing: Study Falsely Claims Economist Affiliations | The Big Picture Says:
February 15th, 2011 at 9:01 am
[...] Who Was Astroturfing Forged Letters Against FinReg? (February 12th, [...]

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